As will no doubt be reported everywhere shortly, Tesla and SolarCity have reached a deal for Tesla to buy SolarCity. The Wall Street Journal says, "The all-stock deal values SolarCity at about $2.6 billion, with SolarCity stockholders receiving 0.11 share of Tesla for each share of SolarCity, valuing them at $25.83 apiece, according to Friday's closing prices. The deal's value comes in lower than the original range of $26.50 to $28.50 per share Tesla had proposed in June. Mr. Musk said Monday he wasn't involved in talks about the valuation of the purchase."
Electric vehicle maker Tesla expects to achieve "significant" cost savings and "dramatic improvements" in manufacturing efficiency as a result of the acquisition of solar panel installer SolarCity, Tesla Chief Executive Officer Elon Musk said on Monday.
Musk said the combined companies will have a "stronger balance sheet," but likely will require a "small equity capital raise" next year. Both companies have been burning through cash and have projected achieving positive cash flow later this year.
Musk is the largest shareholder in both companies and is chairman of SolarCity. His cousins Lyndon Rive and Peter Rive are co-founders of SolarCity.
Source: Reuters
Additional reporting here and here.
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The USA Today and Reuters report that Tesla Motors and Panasonic announced their intention to open a factory in Buffalo, New York. Photovoltaic cells, and modules containing them, would be made there. Production might begin in 2017.
The two firms signed a non-binding letter of intent to make the cells for Tesla's stationary power storage units, the Powerwall and Powerpack.
The companies are already collaborating in the production of storage cells for rechargeable batteries.
previously:
- Tesla Soars on Financials and Ratings
- Elon Musk's Tesla Offers to Buy Elon Musk's SolarCity, Shares Tumble
- Tesla and SolarCity Reach Agreement to Combine
(Score: 4, Touché) by MichaelDavidCrawford on Tuesday August 02 2016, @03:32AM
Hey bro, can you spare a dime for a man who's down on his luck?
If I give you this money are you going to buy drugs with it?
No man I'm going to invest in stock. TSLA projects positive cash flow.
Yes I Have No Bananas. [gofundme.com]
(Score: 3, Insightful) by frojack on Tuesday August 02 2016, @03:55AM
Musk repeated that if the deal is consummated, the combined Tesla-SolarCity could require a "small equity capital raise" next year.
Translation:
They will have to issue more stock to cover the cash-burn that the battery factory is costing them. That depresses the value of all existing shares proportionally.
If SolarCity changes its business model (which is basically a roof-rental in exchange for slightly cheaper power) they might actually sell enough systems to make that big battery plant profitable. But as it works now, they are financing way too much of each installation. And nobody's really sure of how much they are paying for solar arrays.
No, you are mistaken. I've always had this sig.
(Score: 5, Interesting) by LoRdTAW on Tuesday August 02 2016, @01:44PM
I imagine the meeting between the two boards went something like this:
Musk, seated at the Tesla side of the conference table begins pitching his bid to solar city for a merger.
Musk then gets up, walks to the other side of table, the solar city side, and sits down in a posture evoking heavy thought.
Musk then begins to explain his thoughts on how the merger will be beneficial or harmful to solar city.
Again, musk gets up, walk back to Tesla side of table and begins to further explain his greater plans for the future.
This goes on for an hour or so. Progressing from casual stroll to furious running as the excitement escalates.
Finally, a sweaty Musk seals the deal and the two sides come to an agreement. He shakes his own hand.
Well done sir!